IT Exports have seen exponential growth over the past couple of years. We saw over $2 billion in IT exports in the fiscal year 2020/2021. We have all been waiting for the government to announce a policy to support IT companies around the country. Shaukat Tarin, Finance Minister has announced a brilliant Rs10 billion fund as cash rewards to the IT companies against their exports. He has also announced a 5% rebate for IT exports.
The announcement was made while the federal minister met the Pakistan Software Houses Association (P@SHA) delegation, who also expressed PASHA’s concerns about the Federal Board of Revenue being a bully to the IT exporters lately.
We are pleased to announce to that the the Finance Minister has approved a fund to provide 5% Cash Reward to IT/ITeS companies against the trade surplus of their exports of products & services from Pakistan. This was a long-standing demand of P@SHA.#5pcCashReward #ITIndustry
— P@SHA (@PASHAORG) August 10, 2021
Apart from the cash rewards and rebates, it was also announced that 1% of the annual remittances by the IT sector would be allocated to PSEB. These funds will be used to skills development, capacity enhancement of IT companies, branding, marketing, and establishment of software technology parks across Pakistan.
PSEB Managing Director Osman Nasir said that the decision will eventually help increase remittances from the IT services up to $3.5 billion in the ongoing fiscal year against $2.1 billion in 2020-21 only because the multinational companies do not bring all the earnings back to the country.
“There are many expenditures and payments for the companies around the world but due to restrictions they do not remit all amount into Pakistan, now it has been decided that the foreign companies can repatriate their profits to any foreign country,” he added.
One of the major announcements included relief for the freelancers. The federal minister said that freelancers will now be allowed to create a special dollar account to receive their remittances. Previously, it was a headache for freelancers as most banks did not allow them to create a bank account based on foreign remittances. They instead asked for a valid job offer with a monthly salary.
“The industry needs up to 50,000 IT experts annually but we will never grow if freelancers cannot operate in an open environment,” said P@SHA Chairman Barkan Saeed.